00:00Lizanne Saunders of Charles Schwab remaining cautious into 2026, saying we believe the macro environment will continue to be unstable, but stocks can likely turn higher given a firmer earnings backdrop.
00:11Lizanne joins us now. And Lizanne, this is what a lot of people are saying. Just watch the earnings. Show me the money. And the companies can do that. And then you'll start to see gains.
00:18Just how do you think it's going to play out in terms of a tale of two halves, a tale of rotations, et cetera?
00:23Well, you know, we've been talking a lot and writing a lot about the K-shaped nature of this cycle. It's become a bit ubiquitous.
00:32But I think one place where you're actually already starting to see convergence is in the earnings growth rates of the tech, AI, mega cap tech, you know, different cohorts, their earnings progress.
00:44So if you look at any of those cohorts, a year and a half ago, you were running at earnings, year-over-earnings growth rates of about 50 percent.
00:52But those have been decelerating maybe into the 20 percent rain, where the other part of the market is actually seeing accelerating rate of earnings growth.
01:02So I'm a big believer in the old adage about, you know, better or worse can often matter more than good or bad.
01:07And I think it's the trajectory of earnings that is one of the reasons why we've seen some dislocations within these prior leadership areas,
01:15only two of the MAG-7 outperforming the S&P and opportunities that are being found outside of those prior leadership names.
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